Issue #221 | Jan. 21, 2010 | by Andy Kowl with Bret Kinsella
According to the International Air Transport Association (IATA) each piece of lost luggage costs between $90 and $100 in direct costs. When ODIN Technologies, our beltway neighbors, released their RFID Baggage Tag Benchmark last month showing accuracy up at 99.9%, after airports report barcode accuracy at 90% or less, we began a dialogue.
“We expect half the airports worldwide to be using RFID in the next five years," Patrick J. Sweeney II predicts. ODIN’s founder pointed out about a dozen airports globally already use RFID for baggage tracking.
“We’ve had airports contact us about using stimulus money to modernize baggage systems in an effort to make their airports more attractive to international carriers and cut costs at the same time," Sweeney said. Airlines and airports have 35 year-old barcode systems in need of replacing.
"It is a very fast return on investment, especially since more than 10% of all baggage errors are caused by unreadable barcodes whereas more than 98% of all RFID tagged baggage today is read properly the first time."
Still, there was a burning issue I needed solved: what's up with all these airports' use of luggage tagging which I have written about, but never seen.
Can there be single-airport ROI?
Obviously, one day when most airports employ RFID there will be huge, universal benefits. But with no other airports using RFID yet, is there that much value tracking bags inside any one airport?
And when exactly are the bags tagged, I have wondered? Is luggage tagged upon arrival of the plane for the short ride to the carousel - or upon arrival of the bag with the passenger? Since most airports receiving said bags cannot actually make use of the tags, yet, do the airlines make any use of them in flight?
For example, I know McCarran International Airport in Las Vegas was the first U.S. facility to commit to UHF-tagged luggage airport-wide. But I have flown in and out of Vegas many times since then, I'm pleased to report, but have not once seen an RFID inlay under the barcode on my luggage. And I've looked.
In fact, airports using RFID say they are getting ROI now. Still, I know I am not the only one who has these questions, because I have had this conversation with others who have the same confusion.
Now after speaking with Bret Kinsella, an industry leader from ODIN, I better understood what is going on. He reports (in italics):
The inside workings of luggage tracking
Most systems tag departing customers' bags at check-in. The savings associated with reducing mishandled bags between check-in and the departing plane typically pay for the whole system fairly quickly. The poor performance of barcode on automated baggage sortation conveyor systems, usually only 86-90% accurate, means the airports have a 10-14% exception handling rate. RFID payback begins to accumulate rapidly with 98-99.9% accuracy.
McCarran tags all bags those where Las Vegas is the origination point as well as bags from arriving flights for transfers. It assists the baggage handling all the way to the carousel or onto the transfer flight. They are benefiting from the same improvements as for originating bags.
"It brought us significant efficiency," said McCarran's Information Systems Director Samual Ingalis in our
RFID Theater video last week, who also predicts "RFID will be the standard around the world." The 10% exception rate from barcode inaccuracy means there are "6-7,000 bags (daily) somebody has to manually intervene with." Ingalis adds that although he uses 10% for his calculations, "in actuality the barcode accuracy sometimes gets all the way down into the 70 percentile range."
Other airports where the tagged bags pass through do nothing with the tags now. Tags all have standard IATA compliant barcode and human readable which the other airports use, even if they have RFID in place. The reason we were hired by IATA last year was to help establish an industry standard so the top airports could begin to leverage the tags from originating airports where RFID was used. The guidelines are now in place for RFID interoperability throughout the air travel system.
Tag performance often varies in different frequencies. Conveyor sortation is the key use case we tested because it is the biggest pain point and the most difficult.
Patrick Sweeney added, "For Class B airports or major carriers, RFID can provide a pay back in less than 12 months. In the past the U.S. Department of Homeland Security has made funding for these projects available for Airport authorities because of the faster access to tagged bags and enhanced security. Now that airports have more variety in quality tag choices and solid ROI case studies, there has never been a better time to invest in RFID.”
Next time I travel through Las Vegas, I'm taking a closer look.
To purchase a copy of ODIN's "RFID Baggage Tag Benchmark" ODIN technologies Store
